Robert Munro v Atwood Oceanics Australia Pty Ltd T/A Atwood Australian Waters Drilling Pty Ltd

[2016] FWC 1625

[2016] FWC 1625

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Robert Munro
v
Atwood Oceanics Australia Pty Ltd T/A Atwood Australian Waters Drilling Pty Ltd
(U2016/4524)

COMMISSIONER ROE MELBOURNE, 24 MARCH 2016

Application for relief from unfair dismissal – extension of time and genuine redundancy.

[1] It is the usual practice of the Fair Work Commission to consider the extension of time issue separately from the matter of genuine redundancy. The facts associated with genuine redundancy are usually intertwined with the issue of the merits of an application should it be found that the redundancy is not genuine. However, in this case the facts concerning the reasons for delay in making the application were inextricably linked with the facts concerning genuine redundancy. For that reason, with the consent of the parties, I decided to consider the evidence and submissions in respect to these matters together and to determine both matters. I will consider and determine the extension of time matter first and then if necessary I will consider the genuine redundancy issue.

[2] Mr Munro was employed by Atwood Australian Waters Drilling Pty Ltd. Mr Munro described the company on his application as Oceanics Austral Pty Ltd. I am satisfied that the correct identity of the employer is Atwood Australian Waters Drilling Pty Ltd and I amend the application accordingly.

[3] Mr Munro was allegedly made redundant on 31 December 2015 and was allegedly notified of this by email. The email stated that the termination of employment took effect on 11 January 2016. On 8 February 2016 Mr Munro contacted the HR manager to query why he had not been included in the crew change which had occurred that day. On 9 February 2016 the HR Manager advised Mr Munro that he had not been included because he was no longer employed and that he had been terminated for reasons of redundancy on 11 January 2016. Mr Munro sent a further email on that day questioning how he had been made redundant when two other workers had been transported to the Atwood Falcon the previous day (being the day Mr Munro would have, if his employment were ongoing, participated in the crew change).

[4] Mr Munro does not dispute that he received notification of the dismissal by letter of 31 December 2015 and that the notification advised that the termination was effective from 11 January 2016 and that he was paid redundancy payments and accumulated entitlements at that time. Mr Munro says that he became aware on 8 February 2016 that someone else was doing his work and that the Atwood Falcon on which he had been employed had not in fact been taken out of service. The decision to take the Atwood Falcon out of service prior to his next swing on board commencing 8 February 2016 was the reason given for redundancy.

[5] In other words the reason for the late application in this case is because Mr Munro accepted that his dismissal had been a genuine redundancy at the time it occurred but then discovered facts which he believed exposed that it was not a genuine redundancy and that he made his application soon after he became aware of this situation.

[6] Mr Munro attempted to lodge his application on the evening of 11 February 2016 but failed to properly attach the application to the email. He submitted the attachment on the morning of 12 February 2016.

[7] The 21^st day after the dismissal took effect is 1 February 2016. The application is therefore 11 days late.

[8] In cross examination Mr Munro conceded that it is possible that he might have first become aware on the evening of Friday 5 February 2016 of the fact that contractors had been engaged for the vessel. He did not concede that this was the fact but rather he accepted it was a possibility. Mr Munro contacted the HR manager on Monday 8 February 2016 and I am satisfied that he was clearly aware on 9 February 2016 that it was in fact true that contractors had been engaged to do the work he may otherwise have done and that the employer was not going to alter this situation. It was reasonable for Mr Munro to raise the issue with the employer before lodging the form. It is reasonable for an employee to confirm the facts rather than acting upon rumour. He did that on 9 February 2016. I am satisfied that Mr Munro made the application within two days of this occurring. It is possible that he could have made the application on 9 February 2016 but I am satisfied that the application was made with reasonable expedition after 9 February 2016. I am satisfied that Mr Munro has a strong explanation for the whole of the period of delay which supports a finding of exceptional circumstances. It is an unusual circumstance that an employee relies upon the information given by the employer in deciding to accept termination of employment for reasons of redundancy and then finds out facts which give rise to serious questions about the reasons given.

[9] The issue of whether or not there was a genuine redundancy is hotly contested. If the statements and submissions of Mr Munro were established there is an arguable case that the redundancy is not genuine. All three aspects of this question are contested: whether the job was no longer required to be performed by anyone, whether consultation met the requirements of the Agreement and whether redeployment was possible.

Conclusions in respect to extension of time

[10] Section 394 of the Fair Work Act 2009 provides that I may allow a further period for the application if I am satisfied that there are exceptional circumstances taking into account:

“(a) the reason for the delay; and
(b) whether the person first became aware of the dismissal after it had taken effect; and
(c) any action taken by the person to dispute the dismissal; and
(d) prejudice to the employer (including prejudice caused by the delay); and
(e) the merits of the application; and
(f) fairness as between the person and other persons in a similar position.”

[11] For the reasons discussed earlier there is a strong reason for the whole of the period of the delay which justifies a finding of exceptional circumstances.

[12] Mr Munro was aware of the dismissal before it took place so this is a neutral factor.

[13] Mr Munro took action to dispute the dismissal in the few days prior to lodging his application and shortly after becoming aware of facts which suggested his redundancy was not genuine. This is also a neutral factor.

[14] There is no particular prejudice to the employer beyond the ordinary. The employer argues that because the relevant senior manager who was involved in the redundancy process has himself been made redundant and has returned to the US the defence of the matter is made difficult and potentially costly. I am not satisfied that this is a significant factor which should stand in the way of justice. The employer is a large organisation with significant resources. Ms Sutherland is able to give relevant evidence. This is a neutral factor.

[15] For the reasons discussed earlier I am satisfied that there is an arguable case. It is also clear that if the employer case is established the case would not succeed. Without considering the facts and submissions the merits are a neutral consideration.

[16] I am not satisfied that any decision I might make would affect fairness between Mr Munro and others in a similar position. Mr Munro suggests that there may be other employees in a similar position. I am not satisfied that the considerations in respect to those employees would be any different to those affecting Mr Munro if indeed they are in a similar position.

[17] Taking all of the factors specified in Section 394(3) of the Fair Work Act 2009 into consideration I am satisfied that there are exceptional circumstances which warrant the granting of an extension of time in this case.

The issue of genuine redundancy

[18] The merits of this case centre around the issue of whether or not there was a genuine redundancy. The employer argues that the redundancy was genuine in that at the time the decision was made the Atwood Falcon was to have been taken out of service prior to the 8 February 2016 date on which Mr Munro would have returned for his next swing. The employer argues that due to unforeseen circumstances namely a cyclone which affected the rig from 27 January to 3 February it was necessary to keep the vessel in service for a longer period. The employer used labour hire employees to cover this extension. Ms Sutherland, HR manager for the company, gave evidence that the drilling was completed on 3 February 2016 and that the vessel was then taken out of Australia on 14 or 15 February and arrived in Malaysia in early March 2016. Ms Sutherland gave evidence that although some of the same work, including the rigging or leading deckhand work usually performed by Mr Munro, continued to be required after the drilling was completed only one third of the number of crew used for drilling were required for the transport of the vessel to Malaysia.

[19] The employer argues that the consultation requirements were met and provided evidence of correspondence to employees on 26 December 2015 providing information about the likely redundancies and the reasons for them and details of briefing meetings which were organised for employees, including those who were off shift. The employer also argues that it considered redeployment options and concluded that there were no viable options including in associated entities. Mr Munro suggests that redeployment was not properly considered. The relevant correspondence from the employer does state that the option of vacancies on other vessels and at head office has been explored and that vacancies are not available at the relevant time.

[20] Mr Munro conceded that as at 11 January 2016 he understood that the work had commenced on the last of the drills for the contract with BHP. He understood that work was ahead of schedule and that no other contracts had been found for the vessel and that was why he was being made redundant. At the time he did not consider that the redundancy was anything other than genuine. Mr Munro conceded he was aware of the telephone consultation sessions and chose not to attend. Mr Munro gave evidence that he had a telephone conversation with Ms Sutherland a day or two after the 26 December 2015 redundancy notice and that he raised concerns with her at that time about health cover and that she responded to those concerns. Ms Sutherland asked him if he wanted to discuss any issues raised in the 26 December correspondence. Given that Mr Munro and a number of other employees being made redundant were during a period off the vessel and were widely distributed geographically, I am satisfied that reasonable information was provided in the 26 December 2015 correspondence and reasonable opportunity was given to attend consultation meetings. I am satisfied that the arrangements made by the employer for consultation were adequate. I am satisfied that the consultation requirements of the Atwood Oceanics Enterprise Agreement 2013 were met.

[21] Mr Munro conceded that the reasons for the delay in finalising the drilling were matters beyond the company’s control and were unexpected and could not have been known to the employer as at 31 December 2015 when the redundancy decision was advised or on 11 January 2016 when it took effect. If it was a bona fide redundancy situation at the time the decision was made and implemented, it doesn’t become something different if the situation changes due to unexpected matters beyond the company control.

[22] Mr Munro points to a fleet status report dated November 2015 which listed the Atwood Falcon as located in Australia working for BHP on a fixed term contract ending March 2016. I am satisfied by the evidence of Ms Sutherland and Mr Munro and the documents provided that as at December 2015 the drilling work was ahead of schedule and that there is no reason why the employer was required to continue to engage employees until March 2016 for work which was not required. The terms of engagement of Mr Munro under the Agreement and his letter of appointment were full time and permanent and not tied to any particular fixed term contract.

[23] I have no reason to doubt the evidence of Ms Sutherland that she made inquiries concerning any possible vacancies on other vessels or in the head office and that there were no available vacancies. I have taken into account the nature of the business in reaching that conclusion. I also considered the issue of related companies and there is no reason to believe that there were any redeployment opportunities. It is important to note that the relevant time for this matter to be considered is between 26 December 2015 and 11 January 2016. The fact that there might have been a short term opportunity created by the delay to the drilling work due to the cyclone does not alter the fact that at the time the redundancy occurred there were no redeployment opportunities.

[24] Mr Munro argues that his job was contracted out because a labour hire worker preformed work as a rigger or lead roustabout (Mr Munro’s classification) on the vessel from 8 February, the date he would have recommenced work if the redundancy had not occurred, until early March 2016. Of course there are circumstances where the contracting out of work will not be a genuine redundancy situation. There are also circumstances where the employer should consider the issue of altering the use of casual, contract or labour hire as part of consultation and redeployment considerations. However, an employer is not generally prevented from outsourcing work for genuine business reasons. Where this occurs it may be open to conclude that the job of the employee is no longer required to be performed by anyone. In the circumstances of this case a decision was made for genuine business reasons to send the vessel offshore earlier than expected due to the drilling work being ahead of schedule and because no other contracts could be found. There is no obligation on the employer to keep the vessel for a longer period in case another opportunity might be found or in case something unforeseen goes wrong.

[25] At the time that the decision was made to make Mr Munro redundant I am satisfied that his job was no longer required to performed by anyone. It was a reasonable business decision to determine that a substantial proportion of the workforce be made redundant to coincide with the end of the drilling work. The work required over a few weeks to get the vessel from Australia to Malaysia is distinguishable from the normal drilling work. Even though some of the functions required in that work are the same, including the rigging work performed by Mr Munro, the overall numbers and distribution of the work is different. There is no evidence concerning how the staffing of the vessel during the voyage from Australia to Malaysia would have been organised had the delays due to the cyclone not occurred. I am not satisfied that there is any evidence to support a contention that in December 2015 the plan would have involved someone else doing Mr Munro’s work or that the redundancy was anything other than genuine. Mr Munro’s representative made a number of assertions about sham contracting and the number of riggers or lead roustabouts who were required for the towing journey from Australia to Malaysia and other matters but there was no evidence to support these assertions. Mr Munro conceded that the only reason work continued beyond February 8 was the unforeseen delays; that is, delays which only became apparent after 11 January 2016.

[26] I am satisfied that the reason that labour hire personnel were hired to do Mr Munro’s work for a short period from 8 February 2016 is because of the unforeseen delays in completing the drilling work due to the cyclone.

[27] It may have been fairer if, when the unforeseen circumstances arose, the employer had told Mr Munro about the situation and had encouraged him to apply with the labour hire company. I can understand Mr Munro being upset about the situation. However, after 11 January 2016 there was no obligation on the employer to do so.

[28] The employees engaged on the vessel have been made redundant. Mr Munro has not been discriminated against. The relevant management employees have also been made redundant.

[29] Mr Munro alleges that the timing of the redundancy was designed to reduce costs. There is nothing improper or unreasonable in that provided it was consistent with the NES and the Agreement. Mr Munro alleges that some of his entitlements under the Agreement were avoided. If that is the case then Mr Munro needs to pursue that in another place.

[30] I am satisfied that at the time that the decision was made and implemented the job was no longer required to be done by anyone. I am also satisfied that the consultation requirements of the Agreement were satisfied. I am also satisfied that redeployment opportunities were explored and redeployment would not have been reasonable in the circumstances.

[31] I am therefore satisfied that this was a case of genuine redundancy. The application is therefore dismissed.

COMMISSIONER

Appearances:

Ms D Bohnen appeared for the Applicant.

Mr M Vallence appeared for the Respondent.

Hearing details:

2016

By telephone

March 9

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